SDT: SRA should have disclosed statement much earlier
The Solicitors Regulation Authority (SRA) has been ordered to pay a solicitor costs of £184,000 over a prosecution the Solicitors Disciplinary Tribunal (SDT) described as “improperly brought”.
Simon James Price had sought costs of £417,000 but the SDT found some of the claim excessive after deciding that the SRA had failed to disclose a crucial document much earlier in the process.
The SDT was ruling on the SRA’s application to withdraw the allegations against Mr Price, principally on the basis of the diminished public interest in pursuing the proceedings and the diminished prospect of obtaining an order against him.
The allegations were not detailed but related to an alleged failure to check a client’s source of wealth and funds more than a decade ago.
The SRA told the tribunal that Mr Price had filed a “lengthy and detailed” answer in May 2024 which raised “a number of new points” not previously made on his behalf.
This provided “new information suggesting that others in the [unnamed] firm shared the responsibility with him for the failures in due diligence”.
The SDT concluded that it was no longer in the public interest to continue with the proceedings and that there was no realistic prospect of an order being made against Mr Price.
It went on to consider Mr Price’s application for costs. The starting position in the SDT when the SRA does not succeed in a prosecution is no order for costs as it is acting in the public interest.
There has to be a ‘good reason’ to depart from this – the fact that Mr Price might have successfully defended the proceedings was not enough.
The SRA argued that a costs order would have “a chilling effect on [its] ability and willingness to bring prosecutions when the factors for and against prosecution were finely balanced”, as they had been here.
The SDT heard that, in July 2022, the SRA’s specialist anti-money laundering investigation officer (IO) recommended referring both Mr Price and his firm to the tribunal.
However, following detailed written responses, the IO produced a ‘statement following representations’ (SFR) in May 2023 that concluded there was no proper basis for referring either.
In September 2023, the SRA nonetheless decided to refer Mr Price. Proceedings were issued in February 2024 after the SDT certified he had a case to answer.
The SRA did not disclose the SFR to Mr Price until August 2024 and did not refer to it in its application to withdraw the proceedings.
The SDT held that the SFR should have been disclosed to Mr Price “far earlier in the process than it was” and also mentioned in the application.
This meant there was a good reason for departing from the starting point. The SRA had brought proceedings, “relying in part on the decision of its specialist AML investigating officer in the knowledge that the IO no longer considered that the prosecution of Mr Price was tenable”.
Further, it had failed to disclose the SFR until shortly before the parties were to file and serve their submissions on costs.
As a result, the proceedings had been “improperly brought”, the SDT said. “This was a case where, due to the [SRA’s] conduct, a costs order should be made and it would not cause a chilling effect on the regulator, rather it would ensure that the regulator acted in a fair, transparent and responsible manner when bringing proceedings.”
Mr Price sought his costs from the date of the SFR, totalling £417,000. The SDT disallowed the first tranche of £49,000, for the period up to the issue of proceedings, because Mr Price may well have incurred those costs anyway.
Had he been in possession of the SFR, he may have even spent more, none of which would have been recoverable.
Of the remaining sum, the SDT found it had been “excessive” for Mr Price to instruct two KCs and junior counsel – Tim Dutton KC, Andrew Tabachnik KC and Heather Emmerson – while in addition to using a law firm that was “highly experienced in regulatory law”, Russell-Cooke, he had also instructed an external expert in regulatory law.
In the period from the issue of proceedings to delivery of the answer, Russell-Cooke had claimed for 348 hours over 59 working days – or nearly six hours a day. This too was “excessive”.
The SDT summarily assessed the costs payable by the SRA at £184,000.
An SRA spokesman said: “We accept the tribunal’s decision and acknowledge that we should have done better. We have learned lessons about our processes, and we are sorry that Mr Price had to go through parts of the disciplinary process unnecessarily.”
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